Lecture Survey of accounting - Chapter 11: Cost behavior, operating leverage and profitability analysis

Chapter 11 Promissory Notes, Simple Discount Notes, and The Discount Process McGraw­Hill/Irwin ©2011 The McGraw­Hill Companies, All Rights Reserved Promissory Notes, Simple Discount Notes, and the Discount Process Learning Unit Objectives LU11.1 Structure of Promissory Notes; the Simple Discount Note 1. Differentiate between interest­bearing and noninterest­ bearing notes 2. Calculate bank discount and proceeds for simple discount notes 3. Calculate and compare the interest, maturity value, proceeds, and effective rate of a simple interest note with a simple discount note 4. Explain and calculate the effective rate for a Treasury bill 11­2 Promissory Notes, Simple Discount Notes, and the Discount Process Learning Unit Objectives LU11.2 Discounting and Interest­Bearing Note before Maturity 1. Calculate the maturity value, bank discount, and proceeds of discounting an interest­bearing note before maturity 2. Identify and complete the four steps of the discounting process 11­3 Structure of a Promissory Note Figure 11.1 ___________a. LAWTON, OKLAHOMA __________________c. __________________________b. AFTER DATE _______ PROMISE TO PAY TO THE ORDER OF ___________________________________________d. ____________________________________________DOLLARS PAYABLE AT ____________________________________ VALUE RECEIVED WITH INTEREST AT ______e. REGAL CORPORATION f. NO. ______ DUE _____________________g. ________________ TREASURER a. Face value b. Time d. Payee g. Maturity date e. Rate c. Date f. Maker 11­4 Simple Discount Note Simple discount note ­ A note in which the loan interest is deducted in advance Bank discount ­ the interest that banks deduct in advance Maturity Value – The total amount due at the end of the loan Bank discount rate ­ the percent of interest Proceeds ­ the amount the borrower receives after the bank deducts its discount from the loans maturity value 11­5 ... - tailieumienphi.vn